Tejas Networks Share Price Dip 4% Despite Strong Q1 Results

On July 22, shares of Tejas Networks dropped by up to 4%, reaching an intraday low of ₹1,310 each on the NSE, despite the company reporting strong Q1FY25 earnings. 

By 10 am IST, Tejas Networks share price had partially recovered, trading 0.5% lower at ₹1,395.65. Year-to-date, the stock has surged nearly 60%, outperforming the Nifty’s 12% return, and has rallied nearly 80% over the past year.

Tejas Networks reported a net profit of ₹77.48 crore for the quarter ending June 2024, a significant turnaround from a net loss of ₹26.29 crore in the same period last year. The company’s sales soared 696.25% to ₹1,496.07 crore compared to ₹187.89 crore in the previous year’s corresponding quarter. Sequentially, revenue grew by 17.78%. 

Selling, general, and administrative expenses declined by 11.54% quarter-over-quarter but increased by 28.17% year-over-year. Operating income fell by 33.52% quarter-over-quarter but rose by 304.59% year-over-year. The EPS for Q1 was ₹4.44, reflecting a 384.62% year-over-year increase. 

Over the last week, Tejas Networks delivered a 4.58% return, a 69.46% return over the past six months, and a 65.34% return year-to-date. The company currently has a market cap of ₹24,589.21 crore, with a 52-week high/low of ₹1,495 and ₹651.25, respectively.

As of July 21, 2024, one analyst covering the company has given it a Strong Buy rating, with the consensus recommendation being Strong Buy.

During the quarter, Tejas Networks’ inventory rose significantly to ₹3,853 crore, primarily due to ramping up wireless shipments expected to be converted into finished goods and shipped soon. Trade receivables stood at ₹2,052 crore, reflecting higher Q1 shipments. The company collected approximately ₹1,170 crore during this period, with working capital also increasing. By the end of the quarter, the company's cash position was ₹612 crore.

Tejas Networks is targeting several key opportunities to expand its market presence. These include expanding BSNL’s 4G and backhaul network to enhance connectivity and performance, participating in Bharatnet Phase 3 to extend broadband connectivity across rural India, and contributing to the Indian Railways' Kavach project, a Collision Avoidance System to improve railway safety. The company is also aiming to expand its network backbone in the utilities segment to meet the growing demand for robust infrastructure.

Internationally, Tejas Networks is pursuing broadband deals with Tier 1 operators in the Middle East and wireless and metro aggregation deals with a Tier 1 operator in South Asia, positioning itself as a key player in these expanding markets.

Tejas Networks Ltd is a company specializing in broadband, optical, and wireless networking. Its product portfolio includes wireless technologies such as 4G/5G based on 3GPP and O-RAN standards, and fiber broadband solutions like GPON and XGS-PON. The company also offers carrier-grade optical transmission, including DWDM and OTN, packet switching and routing technologies such as Ethernet, PTN, IP, MPLS, and satellite communication products. Additionally, it provides customer, managed, consultancy, and network-building services.

The company serves sectors including telecommunications, defense, government entities, mobile operators, wholesale carriers, utilities, transportation, power, and oil and gas. It operates in Africa and the Middle East, the Americas, and Southeast Asia. Tejas Networks is headquartered in Bengaluru, Karnataka, India.